The Brexit debate is literally quantum — it’s a right royal quantum entanglement

The Brexit debate continues to rage on.

Article updated: 15 March 2019 12:00pm Author: Michael Baxter

The Brexit debate reminds me of a quantum computer. We need adults, but there are precious few of them around at the moment — and until they return, the markets probably won’t be coming out to play.

Nigel Farage said something I found a tad surprising the other day. He was talking to the European Parliament and said that the UK electorate is becoming more united than it has been in years. “There is a greater sense of unity than I have seen for some years,” were his precise words.

Now I am not sure what parallel universe he was talking about, but it certainly wasn’t the one I live in.

“The gap between the political class and public opinion is a gaping chasm,” he said. Well I would say this: “No it ain’t.”

I have never known a more divided nation, views are just moving further apart. Are our MPs acting like kids? Does parliament feel like a crazy circus show? The answer to both is yes, but listen to the public, they are not bystanders, they are part of the circus.

Of course, Labour and Conservative, Lib Dems and SNP, and independents and all the other parties should come together and support each other, try and find common ground, but they can’t because public opinion won’t let them.

There is no desire to compromise between the hundreds of thousands of people who plan to march in London on March 23rd (a March march) and those who shout “Leave means Leave.”

In my family most of us voted Remain but even between us we argue. My wife and I have arguments about Brexit but we both strongly believe in Remain.

In a way, it is like a quantum computer. In traditional computer speak, something is either one or zero. In the Brexit debate it was thought that you are either Remain or Leave. In the quantum realm, you get what is called a superposition, when a particle can be at two places at once. In a quantum computer, you can have one, zero or both, or any of the infinite possibilities in-between. 0.0001% chance of zero — 99.9999% chance of one. That is why, when they finally arrive, quantum computers will change the world — for certain tasks, such as simulating the human brain or folding proteins, they will be thousands (maybe millions) of times more powerful than conventional computers.

With Brexit, it seems to me that there are as many views — and there seem to be no shortage of people holding two views at once.

Who do you blame? Some blame the EU of course, some blame Nigel Farage himself, others blame 30 years of certain foul newspapers that promote hate, intolerance and seem averse to presenting facts without spin. Personally, I blame Julius Caesar, if he hadn’t got himself stabbed during the Ides of March, and instead set about creating a better Roman constitution, the Roman Empire might never have collapsed and there would never have been a need for the EU.

MPs jeering, baying, taunting and jostling is simply a reflection of the country.

Meanwhile in the economy

The latest Purchasing Managers Indexes, or PMIs, suggest that the UK economy will have grown at 0.2 per cent in Q1. Funnily enough, the PMIs for the euro area throw up a similar conclusion about that region.

My own favourite bellwether of the UK economy, the Residential Market Survey from RICS is now deeply into negative territory, but not as negative as it has been in the past ahead of the UK economy falling into recession. The below chart shows the difference between surveyors predicting rise against fall of house prices.

The view seems to be at the moment that house prices are down but not out. The RICS survey suggested that surveyors are less pessimistic about the market 12-months out, a view shared by Capital Economics, for example, which is predicting mild growth in house prices in 2020, but believes house price growth will lag behind growth in wages for the foreseeable future.

Room share platform, ideal flatmate, has worked out that there are 84.4 million bedrooms in the UK but only 65.7 million people. When you consider a fair few of those people share a room, that means there is no shortage of property, after-all.

Actually, other studies looking at the number of houses that have more one spare bedroom suggests that there are around six million homes in the UK that are under-occupied. It’s a view I have long held — that the idea of a shortage of housing is a myth; that people who have fallen to speculative motive for owning a property are living in houses that are bigger than they need as they see it as an investment. And since the view that houses are good investments is based on the belief that there is a shortage of homes — it becomes a circular argument and thus the UK housing market is like a Ponzi scheme. However, since my kids left home, I find I want to live in a bigger house than my three bedroom home, so that we can accommodate them all on special occasions. So maybe my view above was wrong.

What next

Back to Brexit, one might ask what next? Well, there are as many possibilities as there are possible locations of particles in the quantum realm.

MPs are stuck in a super position — it seems to hold and not hold all views at once. But then so does the electorate.

Oh Vienna

I never thought Midge Ure might have hit the nail on the head. But when he sang “Oh Vienna” all those years ago, was it possible he was talking about Brexit? It turns out that according to Article 62 of the Vienna Convention, the UK has the right to terminate any international agreement, if circumstances change. Ergo, no need to worry about the backstop. But then I read that Article 62 only applies to agreements between countries and not between a country and an international body. So maybe we need to go back to worrying about the backstop, unless we can come up with a backup.

So do we go for a Norway deal, a Canada, Norway plus, Canada plus plus, do we rely on Vienna, or shall we all just agree with me that it was Caesar’s fault?

And come to think of it, I never liked Ultravox much anyway.

These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees

Michael Baxter

Economics Commentator

Michael is an economics, investment and technology writer, known for his entertaining style. He has previously been a full-time investor, founder of a technology company which was floated on the NASDAQ, and a director of a PR company specialising in IT.

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